The role of intermediaries in smart specialisation strategies

The concept

A steady flow of innovations – i.e. new combinations of ideas leading to commercially valuable products, services and solutions – requires fluid exchanges of knowledge in a regional innovation system, making use of skills and competences distributed across a variety of actors. In practice, these exchanges of knowledge take place through a variety of mechanisms such as: collaborative applied research, creation of spin-offs, licensing, application of knowledge from patents and publications, mobility of skilled people across organisations, joint business-led projects, etc. Intermediaries are bodies and organisations active in an innovation system, aiming at improving its functioning: their main aim is to alleviate bottlenecks impairing good flows of knowledge within the system.

Intermediary organisations are established over time in territories (countries, but most significantly regions), often with support from public funding. Public funding is justified by their role in addressing system failures.

Intermediaries differ in many ways. They deliver a diversified menu of services to companies, more or less extended, targeting various elements in the innovation process. For each element, the role of intermediaries can include a smaller or a larger role in terms of “soft support”, i.e. their role can be limited to pure brokerage or it can extend towards the provision of in-depth advisory services. The border between an intermediary and an advisory service becomes blurred in the latter case. Intermediaries also differ according to the range of services that they host in-house (e.g. some intermediaries manage public funding programmes while many do not). And the range of organizations that intermediaries connect to each other can be restricted (university technology transfer offices typically link to one university only) or much wider.

The list of most frequent services provided by intermediaries includes:

(support to identification of and) access to new knowledge, equipment and technologies;

(support to identification of and) access to finance;

Proof of concept and validation of new ideas, including patent search and support for patent filing;

Business plan development, including market analyses;

Support for innovation management;

Partner search;

Support for recruiting staff and for inwards and outwards human resources mobility;

Territorially-based organizations, offering generic support to companies located in their local area;

University transfer offices and similar organizations strongly linked to public research organizations;

Business advisory services;

Cluster types organizations;

Business organizations such as sectorial federations, chambers of commerce…;

Local and regional innovation agencies;

Science and Technology Parks.

Intermediaries and smart specialisation strategies

Intermediaries can contribute to smart specialisation strategies in two ways.

First, at design stage, they can contribute to all six steps of RIS3:

Analysing the innovation potential: intermediaries can bring valuable knowledge about specific innovation activities or domains during the RIS3 analytical part;

Setting out the RIS3 process and governance: intermediaries, through their brokerage function, are well placed to help identify and mobilize key actors of the innovation (support) system;

Developing a shared vision: when associated to consensus building activities on broad orientations for S3, intermediaries will help identify opportunities for future development, relying on partnerships within and outside the region;

Identifying priorities: this most delicate part of RIS3 design will be facilitated by the contribution of those intermediaries that have less vested interests in the system than individual actors;

Defining an action plan with a coherent policy mix: as most intermediaries are delivering services to end beneficiaries of the RIS3, they are likely to constitute a sizeable part of the policy mix. The latter should be reviewed in light of the RIS3 orientations;

Monitoring and evaluating: intermediaries often possess useful evidence on their own action, which needs to be capitalized upon and aggregated into a wider monitoring system; the latter is a core basis for policy evaluations, that should be carried out by independent bodies.

Second, and most importantly so, intermediaries will be involved in implementing RIS3 strategies. When RIS3 goals and action plans are clarified, different types of policies are put in place to implement RIS3: in view of their overall mission, intermediaries are likely to play a key role in RIS3 implementation. This role will be most effective when:

Good correspondence is achieved between every intermediary’ missions and actual activity;

Funding to individual intermediaries is influenced by their performance in reaching their goals;

Complementarity is organized between the roles of the various intermediaries ensuring, notably, smooth access for companies to technology and non-technology support; a segmentation of companies is carried out and used to ensure a good coverage of the target population of intermediaries;

Due consideration is given to the possible competition with privately-delivered services: public funding to intermediaries should only be allocated when their services cannot be funded on a market basis.

What can be expected?

An efficient role of intermediaries will led to better knowledge exchanges in a regional innovation system. This will take place when intermediaries develop better synergies and better complementarities between their respective actions, by articulating their services along clearly defined goals in line with RIS3, and ensuring seamless access to their services for their clients. Efficient (networks of) intermediaries will reduce fragmentation in regional innovation systems.

Ultimately, intermediaries have the potential to act as change agents in the system, feeding the transformative goal of RIS3. Hence it is critical that intermediaries’ missions, and that their evaluation are articulated around dynamic arguments, namely their potential to generate changes, open new window of opportunities for innovation to regional actors, and foster regional attractiveness.

A quote

“Innovation intermediaries should help us moving forward and engage in new activities.” from the regional association of SMEs, Lodzkie region, Poland.

Mrs Claire Nauwelaers

Independent expert in Science, Technology and Innovation policy, Advisor to the OECD and the European Commission

Claire NAUWELAERS is an independent Policy Analyst and Governmental Adviser, specialised in research and innovation policy, working in an international environment. She has 30 years of experience in this field and a wide network of contacts with experts, academics and policy-makers. Until 2011 she was working on innovation as a policy analyst in the Regional Development Policy Division at OECD. Previously, she was Research Director at UNU-MERIT, the University of Maastricht and United Nations University, in charge of the research team: “Governance of Science, Technology and Innovation». She started her career as researcher within two academic teams (the Interdisciplinary Centre in Regional Development, and the Interdisciplinary Centre Law-Economics) at the University of Louvain in Belgium, where she was in charge of research projects dealing with economic development and innovation.

Her main areas of research and expertise revolve around the analysis and policy advice about the functioning of research and innovation systems, notably at the regional level. She is working on policy development, analysis and evaluation in the areas of Research, Technological Development and Innovation in response to needs from the European Commission, national and regional authorities. She is currently one of the leading experts in Europe on Smart Specialisation Strategies. She is member of Scientific Steering Committees of several Research Networks, part of policy review teams, and is regularly invited as expert in High-Level Expert groups for the European Commission or Member States. She has published numerous books and articles on policy aspects of research, technology and innovation.

Expert's comments

This excellent paper sets out clearly the vital role which intermediaries can play in making things happen in regional economic development interventions.

It may be helpful to expand further on two points.

Firstly, perhaps more could be made of the role of private sector intermediaries such as banks, accountancy firms, lawyers, venture capital firms, business angel networks and technical and financial consultancies. The paper clearly intends them to be included in the mix, but could be more specific about them and the range of activities they cover.

Secondly, policy makers and practitioners need to be aware of the leverage that the public sector often has to bring private sector intermediaries to the table as partners in regional economic development. Such leverage includes the public sector’s role in procurement, the regulatory powers of local authorities and the influence of local political leadership. Not only can the exercise of leverage be highly effective, it can deliver benefits to the process at a low cost.

Mr David Walburn

After a career in business David Walburn joined Greater London Enterprise in 1986 where he was responsible for venture capital and other small business support, before becoming Chief Executive of the organisation. He was the Chair of the London Business Angels Network and played a key role in the setting up of the European Business Angels Network. He has worked with the UK government and the European Commission on developing public policy initiatives to improve the financing of small and medium-sized enterprises. He was the Chair of Capital Enterprise, the umbrella body for organisations supporting micro business development in London, until 2012.

For the last ten years he has been a Visiting Professor at London South Bank University where he headed the Local Economy Policy Unit and was the managing editor of the journal Local Economy.

He has served as President of EURADA, and been a member of a number of advisory bodies of the European Commission. He has been an active member of the International Economic Development Council in Washington DC and has a wide range of international contacts with economic development organisations.

He continues to write and lecture on small business finance and regional economic development.